Toronto Bylaw Limiting Payday Lenders Gets A Push From ACORN, Councillors

Original Author: Sunny Freeman, Toronto Star

Source: http://www.thestar.com/news/gta/2016/02/28/toronto-bylaw-limiting-payday-lenders-gets-a-push-from-acorn-councillors.html

The current bank and financing system is more complex than ever before, which is why financial literacy is becoming even more important. A failure to understand the terms of loans and other financial products can have crippling effects on a person’s wealth. This week’s article comes from the Toronto Star and details how vicious a cycle payday loans can be and what some are proposing as fixes to the system.



Wednesday, March 2nd, 2016 | MISC


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Rohan Jagroo borrowed $300 from a payday lender to help pay for his 2013 wedding, launching him into a three-year vicious cycle of high-interest borrowing.

When the loan plus interest — $21 for every $100 he borrowed — came due two weeks later, he didn’t have the money. He borrowed from a second payday lender to pay the first, then a third to pay the second. Jagroo receives about $1,000 in disability support each month, but owed between $1,200 and $1,400 every month to the various lenders.

Jagroo shared his story at a Saturday forum hosted by anti-poverty group ACORN, which is fighting to end the concentration of payday lenders — the most expensive type of consumer loan — in low-income neighbourhoods. It’s a fight some councillors are vowing to join with a new bylaw to be proposed next month.

“For basic necessities, people go to these payday lenders to borrow money, and at the end of the month what happens is, instead of being $20 or $40 short, next month it will be double that because of interest,” Jagroo said.

All three payday lenders he used were on the same block of his Weston Rd. neighbourhood, where short-term loan outlets are more ubiquitous than Tim Hortons.

Such clustering is an issue Toronto has been slow to deal with compared with other Canadian cities, Councillor Kristyn Wong-Tam told the meeting’s 75 attendees.

“There’s no reason why there should be 12 of them or 13 of them along Weston Rd.; that is just predatory, because they’re coming…”

 

http://www.thestar.com/news/gta/2016/02/28/toronto-bylaw-limiting-payday-lenders-gets-a-push-from-acorn-councillors.html

 

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Toronto Bylaw Limiting Payday Lenders Gets A Push From ACORN, Councillors

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